Bernanke Blames Housing Market for Slack Economy

The housing market is one of two main factors hindering an economic recovery, Ben Bernanke told a luncheon audience in Arlington, Va., today. The Federal Reserve chairman said, "In some areas, for example, high foreclosure rates have produced significant numbers of vacant properties, depressing surrounding home prices, attracting crime, and creating financial burdens for local governments....
The foreclosure rate remains very high, and many homeowners who have avoided foreclosure find themselves 'under water,' meaning their mortgage debt exceeds the value of their homes."

Bernanke cited high unemployment as the second factor holding back a recovery: "Our economy is far from where we would like it to be, and many people and neighborhoods are in danger of being left behind." The Fed chairman suggested that community leaders and businesses could help improve circumstances that led the economy to grow at a slower rate than predicted for the first quarter of 2011.